AMD accused of keeping GPU competition down, stifling innovation

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An article appears today on Bright Side of the News (BSN), which suggests AMD is guilty of the very things they accused Intel of — namely, of attempting to stifle competition and product development by exerting their influence onto various companies.

The author, Theo Valich, has been able to draw together several off-the-record sources who, under conditions of anonymity, paint a picture of AMD’s desire to only allow controlled competition for its GPU cards by OEMs.

Palit Group (Palit, Palit Multimedia, Gainward and Galaxy) is one of the world’s largest manufacturers of graphics cards. In the past, they desired to take AMD’s reference ATI Radeon HD cards (4850, 4870, 4770 and 4890) and enhance them with features not found on AMD’s reference board (the original product AMD creates for the GPU that they encourage OEMs to use in creating their own models).

Some examples of enhancements seen over reference board implementations by Gainward include Gainward’s Radeon 4850, which had GDDR5 memory installed (instead of the reference board’s GDDR3). While GDDR5 is more desirable for high-end graphics processors due to its much greater memory bandwidth and performance, and is actually the trend all high-end cards are moving towards, AMD allegedly punished Palit/Gainward after that card was produced. First, ATI asked Gainward to stop advertising and selling its 4850 GDDR5 card. Second, when Gainward refused to do so, AMD stopped shipping them 4850 GPU chips, which was a form of punishment — according to the article. In addition, Gainward was also not allocated any 4770 or 4890 GPU parts, AMD’s latest and most advanced ATI Radeon HD products.

As a result of these actions, Gainward is “extremely unsatisfied” and “unhappy” with the way AMD is (allegedly) treating them. According to the article, Gainward accuses AMD of “trying to keep its current partners happy and does not allow custom building boards”, at least if you “don’t belong to the select few” — which are AMD’s close partners only.

The BSN article goes into additional detail about the situation. However, make no mistake about it, the article is stating that what Gainward is accusing AMD of doing is simply another flavor of the exact corporate behavior AMD accused Intel of (and won in court three times to date, with a possible 4th U.S. ruling coming) — of stifling innovation by keeping down the competition.

Palit/Gainward is saying that AMD determines which OEMs will manufacture which products with their GPUs, and if AMD does not like what the companies are doing they stop shipping products and cancel future shipments. As a result, AMD is allegedly stalling innovation, performance, and harming customer choices by keeping companies like Palit/Gainward out of the running by being able to produce non-reference board designs which exhibit better performance than traditional reference boards.

As a result, Gainward’s plans to offer custom boards, water blocks, extremely high overclocked solutions, will not be given unto the market as Gainward is reportedly considering abandoning AMD/ATI as a supplier altogether, opting instead for an exclusive relationship with Nvidia, to which they are Nvidia’s largest customer to date.

If true, what an interesting turn of events. Consider what this would mean: Basically, it appears AMD does not want higher performing products coming out of their GPUs unless they, themselves directly authorize it. They don’t want some another company taking their GPUs and overclocking them to 1.5GHz using liquid cooling, providing such increaed performance relative to air-cooled solutions, because it may indicate exactly how much AMD is holding back on their ATI Radeon HD lines.

In addition, it is the very kind of corporate stifling of competition that is out there. It’s like AMD is trying to protect those companies it feels closest to, while leaving the new guy out-to-dry, something Intel did to AMD during the December 2002 through December 2005 period, according to the most recent EU ruling and fine against Intel for anti-competitive behaviors.

This does not seem to be something along the lines of AMD’s portrayed character. That fact in and of itself could bring the validity of this report into suspicion. However, if it is true, then doesn’t it speak doubly bad for AMD? First by the fact they’re doing such things, second by the fact that they’re publicly stating that such things are wrong (for Intel)?

Here’s hoping it’s all a misunderstanding, and that AMD wants their products to rocket to 80GHz if possible, no matter who does it. In my personal opinion, a great performing products sold by any OEM that tied back to AMD/ATI Radeon products reflects only positively on AMD as a manufacturer of the graphics components.

Speak Your Mind

marbletravis

I think this is inappropriately comparing apples to oranges.

What AMD is doing is protecting its name. Look at it this way, of course AMD wants to sell and better there processors, but if you have not noticed no one usually sees who made the board, they see who made the gpu and if the video card has bugs they blame the gpu manufacturer not the board manufacturers. That is all AMD is doing is protecting its brand name by not allowing companies to manufacturer boards that use their product in a way that would potentially cause problems. Many companies put limits on how you can use a product if you are resale it, it is one of their rights.

This is in no way similar to what Intel does. It would be if and only if AMD was threatening not allowing them to manufacturer video cards with their gpu if they did not stop manufacturing graphics cards with an Nvidia gpu.

also, just a note, I question the integrity of the original article, seems to me its a flame article.

bob

Or maybe ATI just wants to keep board manufacturers from using GDDR5 and overclocking 4850s to match the 4870 specs while undercutting costs by using the cheaper chip? Maintaining differentiation between product lines is not anti-competitive, and it’s unlikely this was anti-Gainward. There are no 4850 boards available with GDDR5, even from their closest partners.

Jonathan

I disagree whole heartedly.

It is AMD’s right to dictate how their designs are used. I don’t think it is stiffling at all in the sense that, what if their design is pushed further then it was meant to and fails? ITs a PR disaster even if it wasn’t their fault.

Secondly, that was NOT what intel was fined for. Intel was fined for paying other companies to not sell their competition. It is absolutely AMD’s right to limit their own sales (maybe not smart, but it is their right). I think the conclusions your draw are not fully correct because you can not compare what Intel did to what AMD is said to have done.

Progamefreak

Lets sue AMD!!! AMD got other companys to sue Nvidia and Intel so why not we just sue the pants off of AMD for doing the same anti compete bull.

Maybe Gainward is trying to get ahead of the game over ASUS and other companys.

This is why Nvidia makes the boards and cPGUs on a good amount of the releases. I think AMD is doing this all wrong and this will cause nothing more but harm then good.

Rick Hodgin

I believe what AMD is accused of doing is another form of what Intel did, not the exact same thing. However, in Intel’s case they made direct payments to keep manufacturers from producing competing products. In this case, rather than making payments, AMD is just stopping shipments of graphics chips to the company that may be able to make a better product than the more mainstream competitors. If true, it seems to me to be a flatly wrong business practice. —– I realize AMD has the right to do whatever they want with their products, but it seems to run contrary to the entire attitude they exhibit regarding Intel’s recent actions. In fact, Patrick Moorhead commented on Facebook within the last 24 hours that “Competition is good”. Could not agree more, though Moorehead’s comments may seem like something less now should this story prove to be true. Still a big IF there.

lennard

3 comments on top and they are all protecting AMD saying its not anti-competitive….however, it is. allowing one group to enhance and the other to not is anti-competitive, which everway you want to look at it, it is. It seems AMD has gotten the hearts of many that they overlook it when the company is accused of doing something wrong (its similar to the apple machine gets). was any of this in AMD’s and Gainward’s original agreement? if no, AMD has no right to punish the company.

the other day, Intel and MSFT defined the netbook market in a way that fell in the middle of benefiting consumers and their shareholders and a lot of bloggers and commenters cried out that they’re stifling competition/innovation. however, isn’t this the same thing AMD is doing now? blocking innovation on cheaper chips that would undercut their profits on higher end chips? his is not thinking about the consumer this is thinking about their pockets.

@marbletravis:
“That is all AMD is doing is protecting its brand name by not allowing companies to manufacturer boards that use their product in a way that would potentially cause problems”
I wonder if you actually knew what you said here. If what you say is true, then why allow only some manufacturers to overclock/innovate with your chips and others not? isn’t overclocking the chips putting it at risk in the first place?

@bob: you were on the right tract. but this is not maintaining product differentiation; Gainward is not marketing the 4850 chip as a 4870. the consumer would benefit from using the Gainward chips right? now by punishing the company for benefiting consumers isn’t AMD intern hurting the consumer? (isn’t this what Intel was fined for? hurting the consumer?). the article wasn’t wrong pointing it out.

@Jonathan: you were also on the right tract; however, it wouldn’t be a PR disater for AMD is would be one for Gainward and to your second point: check my response to BOB. Intel was fined for “hurting the consumer”, and if the original complaint is true, then AMD is “hurting the consumer” too, and that is the same thing;

Also @bob and Janathan about the PR thing, I had 2 EVGA OC factory overclocked cards faild on me, I didn’t blame Nvidia, I blamed EVGA. however, the replacements they sent has been working pretty nicely every since.

joh

Gainward sold HD 4870 spec graphic boards as 4850’s. ATI has a right to protect its designs and margins as well as an obligation to protect the other AIB partners who choice to follow the rules with regards to pricing tiers.

seljo_myeri

This is totally apples and oranges when compared t Intel/AMD.

Lennard/Rick/et. al.,

Would you be saying the same thing if CPU maker Intel cut off a mobo builder, lets call them “Aces,” because they were building a board with “ChipsetX,” but not following the Intel ChipsetX board design specs?

No.

Obligitory legal cover: “Any names or likenesses of companies is strickly fictional and no real companies names are represented here.”

This is what we have here, and this article is nothing but AMD/ATI hater (or nVidia/Intel fanboy) flame bait.

MarbleTravis hit the nail on the head. This is brand protection. If an ATI based GPU card has problems, only the elite enthusiasts will know it was board manufacturerX who was the problem, not ATI. Most ppl will only see the head ATI cards model X have problems…”

seljo_myeri

I meant to say “most ppl will only see the headline that “ATI cards model X have problems”…

lennard

@joh: your last sentence….isn’t that price fixing? isn’t price fixing against the law? I don’t think amd has the right to tell the resellers which price they can sell the boards for….correct me if I’m wrong but come with some sort of evidence though.

@Seljo_myeri: It is not brand protection in the least bit. it is making sure that higher spec cards get sold and that the lesser chip doesn’t under cut the sales of the higher spec cards. this is protecting their pockets at the expense of the consumer. and along with the example you gave, Intel wouldn’t have the right to tell a system builder that they can’t sell computers with overclocked intel chips inside unless that language was stated in their contract.

don’t class me as an intel/amd/ati/nvidia fanboy because which ever company gives me the better bang for the buck I will buy their product, end of story. you seem to easily write this off as “brand protection” without noticing the underlying truth in the matter. you clearly sidestep all that I have said before:

if it is brand protection and amd doesn’t want manufacturers to sell enhanced boards based on their chips, then why do they only allow some manufacturers to do it? clearly this isn’t about brand protection.

“Would you be saying the same thing if CPU maker Intel cut off a mobo builder, lets call them “Aces,” because they were building a board with “ChipsetX,” but not following the Intel ChipsetX board design specs?” you clearly don’t know what you’re talking about, because a refference design isn’t build in stone for manufacturers, thats why you’ll see some boards with 2 PCIx slots and others with 4 slots, thats why you see some boards with 100baseT ethernet and others with 1GB speeds. the refference boards are not the be-all-end-all, because if that were the case then all boards would be the same…don’t you think?

seljo_myeri

re: lennard

>>”you clearly don’t know what you’re talking about, because a [reference] design isn’t build in stone for manufacturers, [that’s] why you’ll see some boards with 2 PCIx slots and others with 4 slots, [that’s] why you see some boards with 100baseT Ethernet and others with 1GB speeds. the [reference] boards are not the be-all-end-all, because if that were the case then all boards would be the same…don’t you think?”

No. I am in no way saying that reference boards/designs are the be-all-end-all and all boards based on a reference MUST be identical. What I AM saying is that the OWNER (AMD/ATI in this case) of the reference design holds the RIGHTs to it, and therefore CAN LEGALLY dictate the terms by which other companies use it, via licensing contracts, as long as they stay within anti-trust laws, etc. I am sure that AMD had a contract with Gainward that spelled out EXACTLY what liberties they could take AND what they couldn’t in respect to the reference design AND clearly stated that ATI reserved their LEGAL RIGHT to disapprove of any design. This has NOTHING to do with anti-trust law because ATI/AMD took issue with products of their own design. If ATI were taking retribution on board makers that also dealt with nVidia BECAUSE they also dealt with nVidia (I.E., if you sell X% of AMD/ATI cards, we’ll give you a discount… *eh hem*, THAT IS what Intel did), then there might be something to these charges. Intel WOULD have been legal to say if you sell X TOTAL # of our chips, we’ll give you a discount, but NOT X% of total sales. I don’t have time to tech a math lesson, so if you don’t understand the difference, please go study % vs. raw number concepts.

You may not LIKE those facts, but there is nothing illegal in what I’ve seen on ATI’s part here. If it is your OPINION that this is some how “not right,” in ethical terms, then buy nVidia cards. Don’t pretend to be self-righteous and all-knowing (saying this is the same behavior as Intel’s), when the more you speak, the more ignorant you show yourself to be.

>> “don’t class me as an intel/amd/ati/nvidia fanboy”

I didn’t. I said the article was bait for people like that. Though, your comments now remind of the old saying: “A stuck pig squeals loudly.” I will admit I did IMPLY that the author leaned toward the Intel or nVidia side of the argument, given the tone of Rick’s article. The original article was not so.

>> “isn’t that price fixing? ”

Maybe. However, there isn’t enough info to tell. It’s much he-said-he-said. Not to mention the fact that, typically, price fixing involves COMPETITORS. I don’t see nVidia complicit in this. *IF* price fixing is going on, then likely nVidia, and for sure the other card manufacturers like “Aces,” “Jade” or “EnergyHue” (fictitious) are also implicated.

>> “if it is brand protection and AMD doesn’t want manufacturers to sell enhanced boards based on their chips, then why do they only allow some manufacturers to do it?”

One word: Centrino

Having said all that, I think ATI stepped in a pile of stank on this one, even though I don’t to this point, think they did anything illegal. Which is where I took issue with comparing it to Intel’s previous actions. Maybe this kind of stuff *should* be illegal, but that is another matter.

and about my fanboy comment, that was a general statement, and a rat backed in a corner will try to bite.

and your last lines…isn’t that almost the same sentiment the original author had? so after you said all that, you went full circle to what the author was saying, thats rich, quite smart too.

big5mellyfart

@lennard I have to assume you don’t really know much about IT or contractual obligation.

seljo_myeri provided an excellent example of branding regulation with Centrino. Apparently it went over your head so I’ll try to speak simply and use small words to help you understand.

Centrino in and of it’s self is nothing special. The chips in a Centrino computer can be in other builds and not be Centrino certified. Basically, Centrino is simply using selected Intel CPUs, chipsets, and wireless in combination (in a broad stroke). Intel claims that these combinations provide the best performance per watt for mobile computing (there are various levels of performance in accordance to the Centrino platforms chosen). If a boutique wanted to call its laptop Centrino they have to abide by these specifications.

If said boutique replaced the southbridge with, IDK ,a SIS chip and the wireless with a Broadcom chip, and called it Centrino, well guess what? Performance would be all over the chart and all that time Intel spent validating their products and building their brand would be wasted. Sure they would probably work together, but would they perform as fast or be as energy efficient? The only way Intel could be sure is by spending resources, testing all of these variants and validating them.

I’m sure testing your competitors products to see if they are as efficient as your own then allowing your distrubitors to swap out the your components you spent thousands of hours validating and improving so distributors can put together a platform with cheaper Chinese junk chips and then call it Intel Centrino and pocket the money saved on using the nonIntel stuff is a great business model and vastly improves brand recognition and reliability(oops ranting run on!). Not to mention overall customer satisfaction.

At long as few customers who are in the know get a sweet deal whats the harm in it right?

The Author of this article is obviously looking to sensationalize the fact that Palit was some how wronged by big bad AMD.

This is the equivalent of placing Coca-Cola Classic labels ON Diet Coke cans and saying it was in the name of innovation. Or maybe mixing the two and calling them Coca-Cola Classic Light. Who cares if it isn’t a sanctioned Coke product if it sells right? Hopefully no one will get sick….after all its INNOVATION!!!

Infringement outright. And this article is nothing more than sensationalism.

lennard

@big5mellyfart:
keep replying condescendingly to my comment and see how hard and fast you fail: through your explanation centrino is a platform and it states you have to use such and such chips to be centrino certified, correct? therefore, without using these chips you cannot be centrino certified.
example of a fictitious situation: a certain company A uses other south bridge and wireless chips than what were specified and was harshly blocked by intel from saying it is centrino, however,at the sametime Intel is allowing company B to use other chips than those that were specified and is allowed to brand it as centrino, don’t you think company A and its customes were wronged in this situation? is intel allowed to write this off as Brand protection? This situation is exactly what AMD/ATI did, why are they allowed to write it off as brand protection?

that high horse that you love to be on will one day lift its hind legs and crush you under is hoofs.

big5mellyfart

My point exactly. Both companies must adhere to the guideline provided by the Centrino platform. Company A B or X Y and Z can’t decide to supplement a broadcom wireless controller and still call it Centrino. It is out of spec. An an albatross to Intel to boot. Why lose your licensing with a vendor by throwing in something unapproved that is most obviously regulated to begin with. AMD is just protecting their intelligent property the same way. Regardless, I heard these parts are mythical creatures anyway. Seems Gainward isn’t shipping any of these anyways in any substantial quantity. Who in there right mind would pay a premium for a torqued up 4850 with current pricing like it is now? Seems like you would end up paying a premium for a one off that would have limited manufacturer warranty, and even more so if they lose out with AMD. Learn to swim.

Pian

Why AMD doing something like that? its good for the consumer if those other OEM’s produce their stuffs with “slightly improved cosmetics or performance” What we need here is more options for us to choose their budget busting cards :p ..c’mon AMD..